@obiero, am trying to join dots here. Jimnah is a very shrewd businessman. He is heavily invested in Equity bank. Should the bill be signed, he would take a very big hit in his portfolio.

So where is the catch ? Could it be that these guys have figured out a way to screw wanjiku once again ?

Have the bill signed, share prices drop massively, wanjiku panics and sells, these guys accumulate at rock bottom prices, re-model the business, and be back in 2-3 years.

Nothing shrewd there! And no investor in place. The last word actually says speculation

I really want to see this capping become law but......Uhuru will simply send this thing back to parliament with some recommendations probably drawn from the banks mou or even drafted by the banks themselves....Mistake No. 1.....Politics will kick in. RAO will have got the perfect opportunity to rope in MDV into his camp. Mpigs from across the divide will also gang up to ensure the capping becomes a reality......This is likely to happen after parliament recess early next year....This are not my thoughts!!!!

Even Raila in his right mind would never sign the bill. But for political reason he will push Uhuru to sign to put him in an compromising position. If he signs and sh!t hits the fan, he will go down as the president who ruined the country's financial sector against the advice of his own Finance Secretary and Governor of Central Bank. If he doesn't sign, then there is something to repeat to the masses over and over - that they are in sh!t coz the president refused to sign the bill.

This is a classical Donald Trump moment. He kept insisting that Obama should pull out all the troops from Iraq "by yesterday" and leave them to build their own country. Obama pulled out the troops (Not because of the Donald), sh!t hit the fan and now Trump is using it against him - calling him the founder of ISIS because he withdrew troops from Iraq and ISIS had a field day.

MPs ganging up??? Highly unlikely. Jubilee MPs will be given a (private) lecture on why they cannot show open rebellion to the president. They will most probably leave the Parliament just before voting - especially the ones that have openly supported the bill. Come October, people will be discussing something else. As someone correctly pointed out, memory ya wakenya ni ile ile.

Clearly you are an idealist and I'm a realist...

I have not said that I want RAO to throw tantrums when this bill is thrown out but the reality is that he will.

I do not necessarily want Uhunye to win the next election but the the reality is that he will.

@Maich,

You are clearly so much against capping even though you haven't given solid reasons for your case. To be honest,you've been more vocal than the Opus Dei man and Felix, who have already admitted the banks can do more to lower interest rates.Indeed, much of your arguments make you seem like a heir apparent to Mwangi or some serious bank shareholder. Who knows, it could be Memba's chair is your uncle or something like that.. On the flipside, you may want to dismiss the kind of stick Jomo will hand over to RAO but i will not. It may turn out to be more than a stick.

@Wazuans,

How do our interest rates compare with those of our region/continent?. Anyone?

I miss Kibaki regime

What we are experiencing now in Kenya is called a deleveraging, and a major one at that, more on that later. However, a small part of it lies here, the central bank prints money and charges people to use it. If you have any better use for Kenyan money than what banks are doing, if you can go to CBK take 1,000 million shillings (1 billion) and pay it back in one year with 140 million, whatever you make on top is yours, you are free to do so. The only condition is you deposit something so you don't con them and run away with their money. So what Kenya is experiencing at 20% is what the guys who agree to put their money together, can do, it is like asking a hawker to reduce the price of the mutumba na anakwambia market conditions hio bei ndio mwisho kabisa! And banks are even collapsing with this interest rate! Indeed other hawkers take 5% out there. And i know if CBK gave you that cash, you would go into the same businesses as the banks, land, tenders, e.t.c.

So why the high rate? For interest is a cost of using money, it depends on transactions carried out with this money, two things, spending, and the credit given and money printed and what it is spent on. What is Kenyan money mainly spent on. Two "types" of goods are in major demand,

1. Physical Goods, in Kenya, the mostly land, houses, mitumba cars, buses, matatus, ugali, chapo, githeri, t.v. radio. mobile, mitumba, medicine, middle class add meat chicken and sausages, and mafuta, there is little beyond that, we do import some aeroplanes and other machines, but such are all imports and a burden.
2. Non physical goods (know as services). Education, airtime, consultation, charge for use of money itself in transactions, mpesa e.t.c.

When best of KENYAN banks borrow money from CBK just as your sacco can, they THINK HARD what to do with the money so they can pay the 140 million on top, they look between mitumba, houses, githeri, typically they all end up in real estate, mitumba cars, and the charges for moving your money from the hands of one good holder, to the other, in which Mpesa is now leading. Typically, our financial sector charges and survives mostly on proceeds of land and real estate speculation, which are their number one activity, saccos and chamas do the same, and our interest rate therefore largely reflects the cost of acquiring a plot and real estate development.

When the central bank does it's natural job and prints cash, all the money goes back to land, githeri, mitumba e.tc and this causes inflation, because bei ya mafuta imepanda, the next time the bank goes to look for a plot, it will cost more. This will continue on and on as long as there is no one who can do anything better with central banks money. The people who handle the cash have to pay higher bills and demand higher salaries, and so CBK carefully or carelessly prints more cash, to meet the cost needed to make it's own money work, and the interest rates rise, and the price of plots rise, to cater for the same, a viscous cycle per excellence!

On the other hand when the money is used to create more (new goods), new enterprises, e.t.c, like mpesa shops and mpesa, when the central bank prints cash, the inflation does not happen as bad, for inflation is "too much money chasing too few good"...so what we are experiencing is an opportunity for someone, only no one knows how to innovate like mpesa, no new goods. It is a case of people having no idea how to use money they are given, maybe 'some sacco' will undercut this interest rate, watu watapona pole pole, watu watajua kutumia pesa, no need to regulate.

@guka - You must be kidding me. I have explained this in so many ways so many times it got tiring. May be before you make certain statements, you should go through the whole thread.

But you are mzee I respect so let me assume it is an honest mistake. Though there is a statement you made and I could not believe it was you! You said that the capping should be implemented and if it affects Kamwana (not the economy!!!) we can reverse it! Surely!!??